Is Bullet Train Strategic Blunder?

Yes

No

I'm actually pro-bullet train. Not because it is a prestige symbol, but economic reasons. As airways get dense, you move passengers to ground. Instead of burning all that cash in gasoline and aviation fuel, you use it to make infrastructure and jobs. Makes perfect economic sense. I personally would want a bullet train going from Mumbai to Delhi via the DMIC, and the Ahmedabad route can be a starter for that.

But having said that as the reality of the project and cost begins to sink in, I think a steady felling of misplaced priorities is seeping in.

Esteemed members your opinion on the question

-yes this is a strategic blunder
-no way this is not a strategic blunder that will cost him his job

Japan is giving Rs88000 Crore loan (80% cost), at 0.1% interest rate, with 50 year return & 15 year grace period. This is as free as money could get.Japan would not even be getting its principle back.I calculated (with inflation rate in Yen being 0.5%) we would effectively be returning Japan only Rs 65,455.76 crore in today's prices.

At these financial T&C, everything makes strategic sense. Bullet train, Hyperloop, Mars colony; we should sign up for anything for which loan is being provided. Even if project turn out to be a dud, we have to pay back less than the principle.

Its a step towards the right direction and a statement to the global fraternity, that India is now ready to develop into a global super power. Modi has envisaged the importance of connecting all the metropolitan's cities with this high speed rail corridor for not only economic progress, but also so that India brings and develops world class technology to change thew connectivity between our major cities. This would also help incorporate new technology to make our railway system safer. This again is a master stroke, wherein Japan is investing 80% at 0.1% for a term of 50 years. What more could India ask for and should be thankful to Japan for literally gifting this technology to India. This just goes to show how India and Japan are coming together strategically in an alliance to counter China.

Japan is giving Rs88000 Crore loan (80% cost), at 0.1% interest rate, with 50 year return & 15 year grace period. This is as free as money could get.Japan would not even be getting its principle back.I calculated (with inflation rate in Yen being 0.5%) we would effectively be returning Japan only Rs 65,455.76 crore in today's prices.

At these financial T&C, everything makes strategic sense. Bullet train, Hyperloop, Mars colony; we should sign up for anything for which loan is being provided. Even if project turn out to be a dud, we have to pay back less than the principle.

Also this line would be extended to Delhi in future.

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Can you please explain in detail how we are paying back less than what we borrow ?

Do you think jica giving us money at 0.1%. They are doing us any favour or that this is a special rate for india

Do you know what are libor rates ?

Look up yen libor rates - both current for 12 months & historical at the below mentioned link

Japan is giving Rs88000 Crore loan (80% cost), at 0.1% interest rate, with 50 year return & 15 year grace period. This is as free as money could get.Japan would not even be getting its principle back.I calculated (with inflation rate in Yen being 0.5%) we would effectively be returning Japan only Rs 65,455.76 crore in today's prices.

At these financial T&C, everything makes strategic sense. Bullet train, Hyperloop, Mars colony; we should sign up for anything for which loan is being provided. Even if project turn out to be a dud, we have to pay back less than the principle.

Yes, There is inflation in Japan (0.5% at present). If this holds, real value of currency degrades overtime. Interest rate being lower than inflation is how you could effectively pay less than principle itself.

ut core consumer prices rose just 0.5 percent in July from a year earlier, well below the BOJ's 2 percent target, as firms remain wary of scaring away households with price hikes.

The central bank cut its price forecasts in July and now expects inflation to hit 1.1 percent in the year ending in March 2018, still exceeding a 0.6 percent rise projected in a Reuters poll.

LIBOR is inter-bank interest rate. It is like what repo & reverse-repo rates are for Indian banking system. Commercial loans are not issued at LIBOR rate (Like commercial loans in India are nor issued at repo rates), let alone issued for such a long period of time. A country offering long term commercial loans on LIBOR rates is essentially providing soft loans.

As i haven't travel alot on trains .... my view are only what i see ... so

1) Thanks to many members here contribution to the Railways tread , we do know that cabins ,engines and tracks are being upgrades to smart, safer, cost effective and fuel efficient BUT unfortunately these upgrade are not keeping up with demand and is on a slow pace

2) Do to this slow pace - we are seeing the accidents on the rise and instead of accountability - we are seeing the standard indian finger pointing!

3) In addition to the first 2 points - The railways are a loss marking entity and this thread will continue further in the future - Thus to sum it up the Railways issue are - Loss making, slow pace of modernization, lack of safety

4) Not put the blame entirely on the railways - we the people are to blame too as - we take facilities given to us for granted and completely misuse/mistreat them. Case and point the recent Tejas express - because of this very reason - none of us will get nice things. Coming to safely , with our chalta hai attitude - we prefer running across the tracks than to use the overhead bridge

5) For the bullet train - lets for now forget the need for one a) Deadline for operation is 2023 , will this make it or will slow place as point 1. B) Safety, very crucial, C) Maintenance D) We the unruly people, need to fine such people E) Every likely that given the cost of the project, the ticket prices will also be high - thus possible (?) it will cater to middle and upper class ie anyone who can afford it - with this , how long will take to recover the cost for the project F) Security of the Train and tracks

6) BIG Question - This Service will be managed by Indian Railways or A Private entity?

Yes, There is inflation in Japan (0.5% at present). If this holds, real value of currency degrades overtime. Interest rate being lower than inflation is how you could effectively pay less than principle itself.

LIBOR is inter-bank interest rate. It is like what repo & reverse-repo rates are for Indian banking system. Commercial loans are not issued at LIBOR rate (Like commercial loans in India are nor issued at repo rates), let alone issued for such a long period of time. A country offering long term commercial loans on LIBOR rates is essentially providing soft loans.

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Inflation also allows us to charge more for tickets when the project becomes live.

They should have upgraded current railways to handle 200-250 KMPH instead of 160. The tech could have come from Japan. I would choose a flight over the train. Additionally, you will find only noisy rich gujjus travelling in bullet trains. And what will Mumbai folks do in a dry state ? Those who are saying that it can be useful for daily commute, pls think , the ticket is at least 1600 INR.

-yes this is a strategic blunder
-no way this is not a strategic blunder that will cost him his job

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As a Congress supporter, every single move Modi makes, even a Modi fart, will appear to you to be a 'strategic blunder that will cost him his job'. Then again Congress supporters also thought that the 'Butcher of Gujarat', 'Maut ka Saudagar' will never come back to power in Guj assembly. Or ever come near the Centre and they will continue looting the country, with the troika of poor, caste and minority in their bag, till eternity. A similar process works in reverse where nearly every act by Rahul Gandhi - any latest speech, his latest visit to a Dalit family and yes even a Shehzada fart - are all signs of their prince 'maturing' and finally leading them to victory.

Obviously reality is different.

"You take the blue pill, the story ends. You wake up in your bed and believe whatever you want to believe. You take the red pill, you stay in Wonderland, and I show you how deep the rabbit hole goes."

This is just the beginning. This corridor will be extended to Delhi and further down to Trivandrum/Bangalore/Chennai. The best part is that most of it will be elevated, so no problems from cows and people shitting on tracks. 5/6th of Indian GDP is to the west of the line which joins chandigarh-Delhi-hyderabad-Chennai.